October 29, 2020
by Elizabeth Lan Davis

On October 29, 2020, the CFTC’s Division of Enforcement (“Division”) issued a staff memorandum providing guidance in recommending how the impact of a respondent’s cooperation, self-reporting, and remediation on the penalty imposed will be addressed in the CFTC’s enforcement orders.  This memorandum is consistent with Chairman Tarbert’s commitment to providing transparency and clarity and will be incorporated into the Division’s Enforcement Manual.  Notably, the memorandum does not change how Division staff will evaluate self-reporting, cooperation, or remediation, the factors of which are outlined in prior advisories issued by the Division.[1]  This guidance, however, will assist in interpreting Commission enforcement orders as it sets forth four specific circumstances in which the respondent’s level of self-reporting, cooperation, and remediation should be described: (1) no self-reporting, cooperation, or remediation; (2) no self-reporting, but cognizable cooperation and/or remediation that warrant recognition but not a recommended reduction in penalty; (3) no self-reporting, but substantial cooperation and/or remediation resulting in a reduced penalty; and (4) self-reporting, substantial cooperation, and remediation resulting in a substantially reduced penalty.  As the Commission’s enforcement orders have become increasingly detailed, this guidance provides additional insight into that particular respondent’s level of self-reporting, as well as its cooperative and remedial efforts, that can be utilized when reviewing and analyzing those orders.     


[1]  Cooperation Factors in Enforcement Division Sanction Recommendations for Companies, available at: https://www.cftc.gov/idc/groups/public/@lrenforcementactions/documents/legalpleading/enfadvisorycompanies011917.pdf; Cooperation Factors in Enforcement Division Sanction Recommendations for Individuals, available at: https://www.cftc.gov/idc/groups/public/@lrenforcementactions/documents/legalpleading/enfadvisoryindividuals011917.pdf; Updated Advisory on Self Reporting and Full Cooperation, available at: https://www.cftc.gov/sites/default/files/idc/groups/public/@lrenforcementactions/documents/legalpleading/enfadvisoryselfreporting0917.pdf

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